Dive Brief:
-
Hostess launches in-store bakery concept that will bring Twinkies and items from Superior Cake Products to the grocery store area. The company will or has launched a Hostess Cupcake cookie, triple-dipped Ding Dongs and decorated Twinkies. The first shipments on the cupcake cookie were in late February or early March.
-
William Toler, chief executive of Hostess, pointed to 4% growth last in the ISB sector. He said the in-store bakery is growing faster than the company's packaged products found on grocery store shelves, giving the company an opportunity for significant growth in its new Hostess Bake Shop.
-
“It really gives us that leverage about where the brand can go in the store where consumers expect and want to see Hostess and where they give us the permission to win," Toler said. "In-store bakery is right at the top of that list.”
Dive Insight:
Loose and packaged snacks – including donut and cake products – are gaining popularity in convenience stores, where shoppers often are seeking quickly consumable treats for eating on the go. Hostess sees the same potential in the supermarkets' in-store bakery department as it looks to expand its legacy products along with those from Superior Cake Products, a regional brand in the northeast it purchased last year.
William Toler, Hostess's CEO, told analysts he intends to roll the Superior name out nationally, giving Hostess a firmer grip on the center-store cake market even as it pursues a plan to grab a piece of the in-store bakery sector through treats such as the Hostess Cupcake cookie, triple-dipped Ding Dongs and decorated Twinkies.
Hostess has aggressively move to expand its reach after the company went bankrupt, liquidated and then was relaunched in 2013 around its Twinkie and CupCakes brands. It's decision to grab a bigger share of the store bakery is not surprising given its rapid product expansion into other areas. During the last year, it has introduced or announced plans for Twinkies Cappuccino for the convenience store channel, a line of collaborative ice cream products under Hostess brands and Deep Fried Twinkies found exclusively at Wal-Mart. With even stronger in-store bakery growth potential, the company appears to be able to leverage its brands for growth, enabling it to overcome the consumer's apparent distaste for sugar.